Comments on: Bucking the conventional wisdom on a fixed-rate mortgage http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/ Helping you invest and prosper Sat, 20 Mar 2010 00:40:13 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Smart Money - Fail Math http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-213393 Smart Money - Fail Math Thu, 18 Mar 2010 13:41:32 +0000 http://www.canadiancapitalist.com/?p=2014#comment-213393 My bank is currently offering Prime -.3% in March 2010 for a VRM. My question is at what level of discount is a VRM better than a FRM? or what % difference between the two is one more of an advantage than the other? and let's say there is a 2% difference does it mean that if the VRM rate only goes up 2% over the course I will be ahead of the game? My thinking is we are closely tied to the U.S. economy and if their rebound is slower ours will at also be slowed and inflation will be modest. Granted rates will go up soon but, how fast? how high? I believe fast is not possible given what the economy just endured. So the question remains if pay an accelerated VRM for the time being will my principal be lower at the end of my cycle opposed to the FRM? My bank is currently offering Prime -.3% in March 2010 for a VRM. My question is at what level of discount is a VRM better than a FRM? or what % difference between the two is one more of an advantage than the other? and let’s say there is a 2% difference does it mean that if the VRM rate only goes up 2% over the course I will be ahead of the game?

My thinking is we are closely tied to the U.S. economy and if their rebound is slower ours will at also be slowed and inflation will be modest. Granted rates will go up soon but, how fast? how high? I believe fast is not possible given what the economy just endured. So the question remains if pay an accelerated VRM for the time being will my principal be lower at the end of my cycle opposed to the FRM?

]]> By: smartcanadian http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-211226 smartcanadian Thu, 18 Feb 2010 04:55:59 +0000 http://www.canadiancapitalist.com/?p=2014#comment-211226 As many have said here, it all depends on your financial situation and, more importantly, your state of mind when it comes to all matters financial. If you want to take risks with money management (smart money management with some risk taking might yield good results), then you would go with the variable rates. But if you just want to be able to know with certainty your mortgage amount, then go for the fixed rate. As many have said here, it all depends on your financial situation and, more importantly, your state of mind when it comes to all matters financial. If you want to take risks with money management (smart money management with some risk taking might yield good results), then you would go with the variable rates. But if you just want to be able to know with certainty your mortgage amount, then go for the fixed rate.

]]> By: Travel Insurance http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-211003 Travel Insurance Mon, 15 Feb 2010 00:40:27 +0000 http://www.canadiancapitalist.com/?p=2014#comment-211003 As a first time buyer over 5 years ago, I also was aware of the stats between Variable being statisitcally lower than a fixed. I decided to play the numbers and took the variable. My rate was prime - 0.5% for the 5 yr term. For about 2 yrs, I was below the rate of the best fixed rate I was offerred at the time (4.99%). Then, for about a year and a half, I was probably paying 0.5% above my fixed offer. Then October, 2008 happened. So, not too long after I was back down to 2% or so. Luckily, when I renewed, the Prime +0.8% days had dwindled back to prime +.02 or 0.1, I forget. I am confident I will be in that 2% range for a year, maybe year and a half. The only thing that influenced, my decision, was could I handle the payment at 4-5% if it went up. As a first time buyer over 5 years ago, I also was aware of the stats between Variable being statisitcally lower than a fixed. I decided to play the numbers and took the variable. My rate was prime – 0.5% for the 5 yr term. For about 2 yrs, I was below the rate of the best fixed rate I was offerred at the time (4.99%). Then, for about a year and a half, I was probably paying 0.5% above my fixed offer. Then October, 2008 happened. So, not too long after I was back down to 2% or so. Luckily, when I renewed, the Prime +0.8% days had dwindled back to prime +.02 or 0.1, I forget. I am confident I will be in that 2% range for a year, maybe year and a half. The only thing that influenced, my decision, was could I handle the payment at 4-5% if it went up.

]]> By: Friday Links – Anniversary Edition - Canadian Finance Blog http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-210345 Friday Links – Anniversary Edition - Canadian Finance Blog Fri, 05 Feb 2010 13:43:08 +0000 http://www.canadiancapitalist.com/?p=2014#comment-210345 [...] My favorite – Bucking the conventional wisdom on a fixed-rate mortgage [...] [...] My favorite – Bucking the conventional wisdom on a fixed-rate mortgage [...]

]]> By: Time to opt for a variable-rate mortgage again? | Canadian Capitalist http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-200892 Time to opt for a variable-rate mortgage again? | Canadian Capitalist Mon, 28 Sep 2009 02:19:24 +0000 http://www.canadiancapitalist.com/?p=2014#comment-200892 [...] rate mortgage (FRM) and a variable-rate mortgage (VRM) was unusually low and it may be better to buck the conventional wisdom and opt for a fixed-rate mortgage. Not anymore. Fixed-rates have been relatively steady — according to Invis, a mortgage [...] [...] rate mortgage (FRM) and a variable-rate mortgage (VRM) was unusually low and it may be better to buck the conventional wisdom and opt for a fixed-rate mortgage. Not anymore. Fixed-rates have been relatively steady — according to Invis, a mortgage [...]

]]> By: Best of April 2009 and Giveaway | Canadian Capitalist http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-191165 Best of April 2009 and Giveaway | Canadian Capitalist Tue, 12 May 2009 03:22:38 +0000 http://www.canadiancapitalist.com/?p=2014#comment-191165 [...] Bucking the conventional wisdom on a fixed-rate mortgage: With bond yields increasing of late, the window on the historically narrow gap that we saw last month between fixed-rate and variable-rate mortgages may be shutting fast. The gap has already increased to 1.04% from the 0.70% we observed last month and a lot of readers concurred with Ben’s opinion that it may be one of those rare occasions when fixed-rate mortgage might be the way to go. [...] [...] Bucking the conventional wisdom on a fixed-rate mortgage: With bond yields increasing of late, the window on the historically narrow gap that we saw last month between fixed-rate and variable-rate mortgages may be shutting fast. The gap has already increased to 1.04% from the 0.70% we observed last month and a lot of readers concurred with Ben’s opinion that it may be one of those rare occasions when fixed-rate mortgage might be the way to go. [...]

]]> By: Ben http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-189614 Ben Mon, 20 Apr 2009 13:26:34 +0000 http://www.canadiancapitalist.com/?p=2014#comment-189614 April 18th update from Canadian Mortgage Trends. http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2009/04/rate-lock-considerations.html April 18th update from Canadian Mortgage Trends.

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2009/04/rate-lock-considerations.html

]]> By: Forum Giveaway and Weekend Reading | Million Dollar Journey http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-188827 Forum Giveaway and Weekend Reading | Million Dollar Journey Fri, 10 Apr 2009 10:30:26 +0000 http://www.canadiancapitalist.com/?p=2014#comment-188827 [...] Capitalist has some thoughts on the fixed vs variable mortgage [...] [...] Capitalist has some thoughts on the fixed vs variable mortgage [...]

]]> By: The Canadian Finance Blog http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-188821 The Canadian Finance Blog Fri, 10 Apr 2009 10:03:51 +0000 http://www.canadiancapitalist.com/?p=2014#comment-188821 <strong>Friday Links...</strong> Million Dollar Journey and Canadian Capitalist have teamed up to create a message board for personal finance talk. Go check out Canadian Money Forum! Canadian Capitalist had an article on bucking the conventional wisdom on a fixed-rate mortgage. Thick... Friday Links…

Million Dollar Journey and Canadian Capitalist have teamed up to create a message board for personal finance talk. Go check out Canadian Money Forum!
Canadian Capitalist had an article on bucking the conventional wisdom on a fixed-rate mortgage.
Thick…

]]> By: A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com http://www.canadiancapitalist.com/bucking-the-conventional-wisdom-on-a-fixed-rate-mortgage/#comment-188761 A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com Fri, 10 Apr 2009 04:47:29 +0000 http://www.canadiancapitalist.com/?p=2014#comment-188761 [...] Capitalist discusses if the decision between Variable Rate Mortgages versus Fixed Rate Mortgages needs to be re-thought, given the low interest rates and other [...] [...] Capitalist discusses if the decision between Variable Rate Mortgages versus Fixed Rate Mortgages needs to be re-thought, given the low interest rates and other [...]

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